Posts Tagged ‘saab bailout’

For anyone disappointed to see soap operas vanish from American television there’s always the Saab saga to fall back on.

Just days after is seemed the maker was going to be forced into an involuntary bankruptcy it has been given at least another temporary reprieve, it has received the first installment of a $97 million bridge loan from one of the two Chinese companies looking to eventually buy a controlling stake in the struggling Swedish automaker.

Automaker Zhejiang Youngman Lotus reportedly has cut a $15 million check for Saab and should have the full $97 million deposited in the troubled Saab’s bank account within the next week or so. It had appeared increasingly likely that the Chinese carmaker and China’s largest auto dealer, Pang Da, were not going to get approval from Beijing regulators to complete their acquisition of a majority stake in Saab. With no new sources of cash, the Swedish maker would have been forced into what likely would have been the break-up of the company.

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The new loan should help Saab cover at least some of its bills. It owes millions to 3,600 Swedish employees – which prompted their unions to try to force Saab into bankruptcy. But it also owes millions to key suppliers. Those partsmakers have been boycotting the company since late March over unpaid bills. As a result, Saab hasn’t produce any cars at its headquarters plant in Trollhattan for more than six months.

A partially-assembled 9-5 body sits on the currently idled Saab Trollhattan assembly plant.

Cash-short carmaker Saab has lined up a new white knight, it claims, a week after an earlier deal with China’s Hawtai Automotive Group unexpectedly collapsed.

The new deal pairs Saab with Pang Da Automobile, a major Chinese dealership chain, and could be worth more than $150 million to the Swedish maker, which has been struggling to reopen its headquarters assembly plant. That factory was idled on March 29 when key suppliers began a boycott demanding Saab cover unpaid bills.

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As part of the new partnership Pang Da will take a 24% stake in Saab – compared to the 29.9% equity holdings Hawtai had negotiated. Pang Da will pay about $100 million for its stake, then another $45 million for vehicles that will be sold through its network of 1,100 dealerships across China. It has also agreed to another $23 million purchase of Saab products within 30 days.

For the Swedish maker, the deal, “will secure Saab automobile’s medium term funding,” said Spyker Cars, Saab’s parent company, in a statement.

Saab Chairman Victor Muller may be looking for an alternate rescue plan to reopen the company's plant.

With a proposed rescue plan still stalled, struggling Swedish automaker Saab’s headquarters assembly plant remains shuttered for the third week, raising questions about its long-term prospects.

The European Investment Bank, which provided the loan permitting Dutch-based Spyker Cars to buy Saab last year from General Motors, has so far refused to approve a deal that would involve the sale of Saab’s factory and other assets to a Russian businessman. A one-time Spyker partner, Vladimir Antonov would then lease those assets back to the Swedes.

That has sent Saab scrambling to line up other options, the company announced in a release that states, “Spyker and Saab Automobile continue to work on securing additional funding. To that end Spyker and Saab Automobile are negotiating equity and debt financing and/or technology licensing with various strategic partners, including various Chinese car manufacturers. No commitments have been received to date.”

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There have also been reports that Saab may turn to former owner General Motors for assistance.

The crisis was touched off, on March 29, when several suppliers demanded immediate payment of overdue bills before they would unload trucks delivering parts needed for the Trollhattan assembly line. The suppliers briefly agreed to work with Saab but the boycott resumed a few days later. The closure of the factory, located next to Saab’s Swedish headquarters, is now in its third week.